New Delhi, Jan 22: India’s residential real estate market entered a new phase of maturity in 2025, transitioning from volume-led expansion to value-driven growth, according to the latest report by the Indian Chamber of Commerce (ICC) and ANAROCK.
While housing sales across the top seven cities declined 14% year-on-year to 3.96 lakh units, the total transaction value rose 6%, crossing INR 6 lakh crore, indicating that premium and higher-ticket homes are increasingly driving the market.
This divergence between volume and value reflects a structural shift in Indian housing. After a muted price phase between 2015 and 2019, residential prices surged nearly 54% during 2019–24, supported by post-pandemic recovery, infrastructure spending, and consolidation among large developers. In 2025, price growth moderated to a healthier ~8%, pointing to a more sustainable, end-user-focused market.
Premium and Luxury Housing Leads Growth
“One of the most striking changes is in demand composition,” said Anuj Puri, Chairman – ANAROCK Group. “Homes priced below INR 75 lakh, which accounted for nearly 60% of sales in 2021, now make up just ~32% of the market. In contrast, luxury and ultra-luxury housing has expanded rapidly, supported by rising incomes, lifestyle upgrades, and improving affordability.”
-
Luxury homes priced above ₹4 crore now contribute 18–20% of total sales, compared to just 1–2% pre-pandemic.
-
The ultra-luxury segment (INR 40 crore and above) recorded a 66% jump in sales in 2025, with the Mumbai Metropolitan Region (MMR) accounting for over 70% of transactions.
Structural Shifts in Residential Demand
-
Tier-I cities continue to lead, while Tier-II cities gain traction.
-
Larger, wellness-focused, amenity-rich homes are increasingly preferred.
-
Demand for 3BHK and larger units has risen to 45–50%, up from 30% in 2018, with average unit sizes across major cities increasing by ~40% since 2021, led by the NCR region.
Supply Trends and Market Institutionalisation
-
Listed and Grade-A developers now account for ~45% of residential supply, up from 28% five years ago, reflecting stronger balance sheets, execution capabilities, and growing buyer trust.
-
The market continues to benefit from macro fundamentals, including robust private consumption (~60% of GDP), tripling of government capital expenditure since FY19, and a healthy banking system with net NPAs at multi-decade lows.
Outlook
India’s residential real estate is increasingly being recognized as a structural pillar of economic growth, capital formation, and urban transformation. Key tailwinds include:
-
Lower interest rates
-
Rising per capita incomes
-
Infrastructure-led urbanisation
-
Growth in Global Capability Centres (GCCs)
-
Increased FDI inflows
-
Under-penetration of housing finance (mortgage-to-GDP ratio at ~11%)
“Residential real estate in India is no longer just a cyclical investment play—it is now a strategic driver of economic development and urban transformation as the country moves toward a USD 7.3 trillion economy,” the report concluded.
